N2H2 to miss 4Q estimates

3 January 200212:43 am GMT

N2H2 Inc. (Nasdaq: NTWO) said Monday that results for the fourth quarter will be below expectations. The company now expects a pro forma net loss between 35 and 38 cents a share. First Call Corp. had been expecting a loss of 32 cents a share.

Shares in the Internet infrastructure company specializing in filtering don't have much room to drop, having closed down 0.31 to 1.69 Friday, after taking a sharp fall from their 52-week high of 33.13.

Revenue is expected to be between $2.3 million and $2.5 million.

The company's financial position remains strong, with over $25 million in cash and marketable securities in hand at the end of the quarter. Full results for the quarter and year will be announced in November.

"During September, normally a peak month for school installations, we experienced lower sales than expected. This, combined with a decrease in advertising revenues, means that total revenues declined from the prior quarter," said president and CEO Peter Nickerson in a release.

The company said it has taken steps to increase productivity and reduce costs, and expects improvements for the next quarter and throughout the coming year. During August and September, N2H2 has increased its productivity, reduced staff by 76 persons, and reduced marketing costs, which peaked earlier in the quarter.